AMEC Foster Wheeler Group Ltd v Morgan Sindall Professional Services Ltd & Ors [2015] EWHC 2012 (TCC)

[2015] EWHC 2012 (TCC)Case No HT-2015-000183
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 14 July 2015
Before
MR JUSTICE COULSON
Between
AMEC FOSTER WHEELER GROUP LIMITEDClaimantMORGAN SINDALL PROFESSIONAL SERVICES LIMITED1 st DefendantMORGAN SINDALL PLC2 nd DefendantMORGAN SINDALL GROUP PLC3 rd DefendantSPIE LIMITED4 th Defendant
Mr Alexander Hickey (instructed by Berwin Leighton Paisner LLP) for ClaimantMr Rupert Choat (instructed by Reynolds Porter Chamberlin LLP) for DefendantHearing Hearing Date: 29 June 2015
Approved Judgment
[1]INTRODUCTION In these Part 8 proceedings, the claimant (“AMEC”) seeks declarations against the defendants that they are bound to provide certain information and documentation arising out of two sets of arbitration proceedings in which the defendants are involved. AMEC also seek delivery up of the documents. For ease of reference, I do not distinguish between the defendants, save where it is necessary in order to analyse their potentially different positions. The applications are opposed on a variety of grounds, some substantial and some procedural. The allotted time for the hearing was taken up by the parties’ submissions, so I was obliged to reserve this Judgment.[2]In Section 2 below, I set out the contractual relationships between the parties. In Section 3 below, I briefly identify the background facts and the issues. Then, at Sections 4 -8 below, I address the five separate grounds on which the defendants rely to deny the claimant’s entitlement to these documents. There is a short summary of my conclusions in Section 9 below. THE RELEVANT CONTRACTS[3]By contract dated 31 March 2003, the Secretary of State for Defence (“SSD”, sometimes referred to in the formal documents as Defence Estates, or “DE”) engaged a company now known as Turner Estates Solutions Limited (“TES”) to carry out design and construction works at HMNB Clyde. The project was known as Project Neptune. TES sub-contracted the works to AMEC (“the relevant sub-contract”). In 2007, AMEC sold their business to the 1st and 4th defendants, on the terms set out below.[4]Pursuant to a Business Sale Agreement (“the first BSA”) dated 3 June 2007, AMEC sold their design and project services business to the 1st defendant, with the 3rd defendant acting as guarantor. Later, I am told that there was an assignment of the relevant rights by the 1st defendant to the 2nd defendant.[5]For present purposes, the relevant contractual provision is clause 8.9 which provided:
“8.9 The Buyer shall, as from and subject to Completion, perform for and on behalf of the Seller and complete and discharge in a proper and workmanlike manner all the Business Contracts and the Buyer shall indemnify the Seller and all other members of the Seller’s group, on an after tax basis, against all Costs of the Seller (or any member of the Seller’s group) under or in respect of the Business Contracts arising after Completion or before Completion but after the Effective Time.”
[6]The first BSA was amended on 27 July 2007 when a new clause was added in these terms:
“8.10 Without prejudice to the generality of clauses 8.2 and 8.9 above and subject always to the indemnities therein contained… the Seller on its own behalf and on behalf of each member of the Seller’s group hereby appoints the Buyer or any other member of the Buyer’s group to act as its agent and agent of each member of the Seller’s group from Completion and to act generally on behalf of the Seller and / or such member of the Seller’s group but in each case only to the extent needed in the proper exercise of the rights and obligations under the Business Contracts or to the extent needed to perform and complete any Business Contracts…”
[7]On 10 August 2007, the 1st defendant issued a general declaration in writing, announcing the appointment of “the Buyer [the 1st defendant] and each member of the Buyer’s Group” to be agents for AMEC “for the purposes of various contracts” (which included the relevant sub-contract).[8]At the same time, by a second Business Sale Agreement dated 3 August 2007 (“the second BSA”), AMEC sold its building and facilities business to the 4th defendant. Clause 9.9 of the second BSA provided as follows:
“The Buyer shall, as from and subject to Completion, perform for and on behalf of the Seller and complete and discharge in a proper and workmanlike manner all the Business Contracts as agent or sub-contractor (including, for the avoidance of doubt, requirements stipulated in any Business Contract with respect to the maintenance and insurance (if any)), save to the extent that a Business Contract has been novated, and the Buyer shall indemnify the Seller and all other members of the Seller’s group, on an after-tax basis, against all obligations and liabilities of Seller (or any member of the Seller’s group) under/or in respect of the Business Contracts arising after Completion or before Completion but after the Effective Time (including any Costs arising as a result of the operation of this clause).”
[9]AMEC were unable to novate the relevant sub-contract in favour of the defendants. Accordingly that sub-contract was one of the ‘Business Contracts’ which, pursuant to the terms of the first and second BSAs, the 1st and 4th defendants agreed to perform on their behalf.[10]In November 2009, the SSD commenced the first set of arbitration proceedings against TES (“the first arbitration”). In December 2009, this gave rise to a Supplemental Agreement (“SA”) between AMEC and both Morgan Ashurst PLC (“MA”, the 2nd defendant as it was then named) and the 4th defendant, referred to in the SA as “SMH”. Although Mr Choat was anxious for me to study in detail the previous Supplemental Agreement, between the same parties, that seemed to me to be irrelevant, because clause 4.1 of the SA of December 2009 expressly stated that it “supersedes and replaces the previous Agreement between the parties dated 1 April 2009”.[11]The Recitals of the SA said this: “A. AGL [AMEC] are a party to the Regional Prime Contract Supplementary Sub-Contract for Core Works relative to HMNB Clyde Neptune Regeneration (the “Sub-Contract”) with Turner Estate Solutions Limited, a company registered in Scotland with registered number SC220014 whose registered office is at 65 Craigton Road, Glasgow, Lanarkshire G51 3EQ (“TES”); B. TES are a party to the Regional Prime Contract Supplementary Contract for Core Works relative to HMNB Clyde Neptune Regeneration (the “Main Contract”) with the Secretary of State for Defence through the agency of Defence Estates at Hilton Road Rosyth (“DE”). C. MA and SMH are performing AGL’s obligations in respect of the Sub-Contract pursuant to the business sale agreements between AGL and Morgan Sindall PLC (subsequently MA) and AGL and SMH dated 3 June 2007 and 3 August 2007 respectively (“BSAs”). D. Disputes have arisen under and in connection with the Sub-Contract and Main Contract; E. MA and SMH wish AGL to enter into a name-borrowing agreement (“NBA”) pursuant to which AGL (through MA and SMH acting as agents of AGL in accordance with the terms of their respective BSAs) will, in the name of TES:(i) conduct and shall pursue and / or defend any adjudication procedure and any DRP procedure (as defined in the NBA); and(ii) conduct and pursue any court proceedings which may be required to implement a decision of an adjudicator / arbitrator (s) or expert in relation to any disputes and / or differences arsing out of or in connection with the Identified Issues and Other Issues defined in the NBA. F. A copy of the NBA is attached hereto.” (i) conduct and shall pursue and / or defend any adjudication procedure and any DRP procedure (as defined in the NBA); and (ii) conduct and pursue any court proceedings which may be required to implement a decision of an adjudicator / arbitrator (s) or expert in relation to any disputes and / or differences arsing out of or in connection with the Identified Issues and Other Issues defined in the NBA.[12]Clause 1.2 of the SA said this: “1.2 MA and SMH undertake, jointly and severally:1.2.1 to perform the obligations required of AGL, expressly or impliedly, in terms of the NBA, including, in the name of TES:(i) the conduct and pursuit and / or defence of any adjudication procedure and any DRP Procedure (as defined by the NBA); and(ii) the conduct and pursuit of any court proceedings which may be required to implement a decision of an adjudicator / arbitrator (s) or expert; in relation to any disputes and / or differences arsing out of or in connection with the Identified Issues and Other Issues defined in the NBA at no cost to AGL;1.2.2 to provide all information or copies of documents in respect of the proceedings brought against DE in the name of TES referred to in clause 1.2.1 of this Agreement that AGL may reasonably request;1.2.3 to indemnify AGL for any liabilities, losses, damages or costs (including legal fees) it may incur, directly or indirectly, through entering into both this Agreement and the NBA, including (but not limited to) those arising from any obligations and liabilities which may arise from the NBA (including any form of security, e.g. bond or guarantee, required under the NBA) or this Agreement, from the performance of the NBA or this Agreement, from any breach by AGL of the NBA arising as a result of the acts or omissions of MA or SMH or from any decision of the adjudicator, court, arbitrator(s) or mediator; and1.2.4 to make payment in advance to AGL of any legal and / or expert fees which MA and SMH may require AGL to pay to TES for TES to pay in connection with any of the proceedings referred to in clause 1.2.1 of this Agreement under the NBA (so as to preserve a right of recovery against DE in respect of such legal and / or expert fees in the event of success in those proceedings) and AGL shall not be obligated to pay any such legal and / or expert fees unless it has received payment in advance from MA and SMH” (i) the conduct and pursuit and / or defence of any adjudication procedure and any DRP Procedure (as defined by the NBA); and (ii) the conduct and pursuit of any court proceedings which may be required to implement a decision of an adjudicator / arbitrator (s) or expert; in relation to any disputes and / or differences arsing out of or in connection with the Identified Issues and Other Issues defined in the NBA at no cost to AGL;[13]The Name-Borrowing Agreement (“NBA”) to which reference was made in Recital F was between TES and AMEC. The Recitals of that NBA, to which I was also referred, said this:
“… 4. AGL has submitted Change Proposals to TES under the Sub-Contract. These have included Change Proposals 84, 237, and 337 (“the Change Proposals”). TES have submitted the same Change Proposals mutatis mutandis to the Authority under the Supplementary Contract. 5. AGL consider that the Authority is not entitled to stop making interim payments to TES by virtue of the actual costs incurred by TES having exceeded the Maximum Cost, and that the Authority ought to pay the sums withheld on this basis (“the Maximum Cost issue”). 6. AGL and TES and, in turn, TES and the Authority, have not been able to agree the payment profile for the purposes of clause 11 of the Supplementary Contract and, mutatis mutandis, the Sub-Contract and the sums (if any) that have accrued and are payable as interim payments as a result (“the Payment Profile issue”). 7. AGL consider that TES have a right to refer any dispute and / or difference arising under the Supplementary Contract to adjudication by virtue of the Housing Grants, Construction and Regeneration Act 1996 and in accordance with the Scheme for Construction Contracts (England and Wales) Regulations 1998 (“adjudication”). Any dispute and / or difference may also be the subject of resolution in accordance with the terms of the Supplementary Contract (“the DRP Procedure”). 8. TES and AGL wish to obtain a decision or decisions in respect of any disputes and / or differences arising out of or in connection with (i) the Change Proposals, Maximum Cost and Payment Profile issues (the “Identified Issues”) and (ii) other issues which may arise now or in the future under the Supplementary Contract and mutatis mutandis the Sub-Contract which shall be agreed in writing between the parties (the “Other Issues”). 9. TES and AGL have agreed that AGL shall conduct and defend certain proceedings in the name of TES. 10. Since the date of the agreement which this Agreement replaces and supersedes, AGL have pursued adjudications against the Authority in the name of TES, and in respect of the Cash-flow Issue and Change Proposal 84. The decisions in one or both of those adjudications may be referred to the DRP Procedure by the Authority or AGL (as TES). TES and AGL wish AGL to continue to resolve those disputes, under both the Supplementary Contract and the Sub-Contract.”
[14]Clause 1 of the NBA provided:
“1. NAME-BORROWING 1.1 AGL shall conduct, and shall pursue and / or defend, any adjudication procedure and / or DRPP procedure in the name of TES in respect of any disputes and / or differences arising out of or in connection with the Identified Issues and the Other Issues (as between TES and the Authority.) 1.2 For the avoidance of doubt, TES and AGL agree that they will both participate in any mediation instigated under the DRPP procedure and this Agreement will not extend to such a mediation.”
[3]THE BACKGROUND FACTS AND THE ISSUES[15]There are currently two sets of arbitration proceedings relating to Project Neptune. As previously noted, the first was brought by SSD in November 2009. The second was brought by TES against SSD in June 2013. As a matter of practice, the cases of TES in those two arbitrations are being run by the 4th defendants and at least one of the Morgan Sindall defendants in these proceedings (probably the 2nd defendants, but it is a little opaque). AMEC has had no involvement in those arbitrations. There was a suggestion that they had been kept up to date by the defendants about what was happening in the arbitrations, but that was plainly untrue: indeed, AMEC only discovered the existence of the second arbitration following the commencement of these Part 8 proceedings in February of this year.[16]In the autumn of 2014, AMEC became concerned that they might be at risk under the terms of the relevant sub-contract. Mr Choat, on behalf of the defendants, confirmed to me in express terms that this concern was well-founded and that, as a result, AMEC had a direct financial interest in the outcome of these arbitrations.[17]On 16 October 2014, AMEC’s solicitors wrote to the 1st defendants to ask for the arbitration documents. At that time, I accept that the claimant was only aware of the proceedings commenced by the SSD (the first arbitration), so the request was confined to that arbitration. The defendants had not told AMEC about the second arbitration.[18]The letter said:
“Historically, AGL has not sought regular updates or information in relation to the arbitral proceedings and none of the parties involved in the arbitration has volunteered anything. However, AGL considers that it is appropriate now to receive updates and to understand the arguments being made in its names. Accordingly and for the time being, we should be grateful if you could provide the following documents served on behalf of all parties in the arbitral proceedings: • Statements of case • Factual witness statements • Expert reports • Certificate of payment between Defence Estates and TES and between TES and AGL (and / or MSBS and Spie).”
A similar letter was sent to the 4th defendant and to TES. The documents requested in the letter are in essence those sought in these proceedings by AMEC. • Statements of case • Factual witness statements • Expert reports • Certificate of payment between Defence Estates and TES and between TES and AGL (and / or MSBS and Spie).”[19]It is unnecessary to set out in detail the terms on which TES and the defendants turned down this request. TES said that, since the arbitrations were being conducted by the defendants, they were the appropriate people to answer the request. On 31 October 2014, on behalf of the 1st, 2nd, and 3rd defendants, the 3rd defendants wrote to say that they were “at a loss” to understand the request, although there was a suggestion of a meeting. A letter before action was sent on 24 February 2015 to which the 3rd defendants responded by expressly and unequivocally declining the request.[20]So the present position is this. The defendants, using the name of TES, are involved in two ongoing arbitrations with SSD. It is common ground that those arbitrations may result in liabilities which the defendants will be unable to meet and which may therefore render AMEC liable for any shortfall. AMEC’s concerns about that potential liability will not have been alleviated by my Judgment in Secretary of State for Defence v Turner Estates Solutions Ltd [2015] EWHC 1150 (TCC), dated 30 April 2015, in which I decided that, as a matter of law, TES’ principal case in the second arbitration was misconceived. I am told that, partly in consequence of that Judgment, the 3rd defendant has issued a public trading statement placing an exceptional charge of £35 million in its accounting books for the half year to 30 June 2015, said to be ‘non-cash’ in nature. And yet, notwithstanding AMEC’s significant potential liability arising out of these arbitrations, the defendants maintained before me that AMEC were not entitled to copies of the pleadings and evidence which they have generated.[21]As already noted, the objections put up by the defendants to the claimant’s claim cover a wide variety of issues. I propose to deal with them in this[4]THE PRE-ACTION PROTOCOL[22]The defendants submitted that AMEC have failed to comply with the TCC pre-action protocol (“the protocol”). They said that, in consequence, they have been “hurried into” defending these proceedings, and that the appropriate course for the Court to adopt was to stay the Part 8 claim to allow compliance with the protocol. In particular, the complaint was that there has been no without prejudice meeting between the parties, which is one of the features of the TCC protocol.[23]In response to this, on behalf of AMEC, Mr Hickey denied that the protocol applied or that, if it did, AMEC were in breach of it. But his principal point was that the protocol should not be used to defeat AMEC’s substantial claims and that if, contrary to his submissions, the court concluded that there had been a breach of the protocol, that should sound in costs, rather than result in a further delay.[24]In my view, Mr Hickey’s submissions are correct. I consider that this is a situation where the protocol is being used as a tactical device by the defendants, contrary to paragraph 2.1.3 of the TCC guide. In short, my views are these: i) I do not accept that the pre-action protocol applies to a Part 8 claim for the production of documents. Such a claim has much more in common with the illustrative exceptions to the protocol, set out at paragraph 2.3.1 of the TCC guide. ii) There can be no question of the defendants being “hurried into” their present position. The letter requesting the documents was first sent 8 months ago. The request is broadly unchanged, as is the defendants’ blanket refusal of it. iii) The court will principally be concerned to ensure that, as a result of the protocol stage, each party to any subsequent litigation has a clear understanding of the nature of the case that it has to meet at the commencement of any proceedings: see paragraph 2.6.3 of the TCC guide. I am in no doubt that the defendants are fully aware of the nature of AMEC’s claim for these documents. A without prejudice meeting would have added nothing except an additional layer of costs.[25]For these reasons, therefore, I conclude that the protocol does not apply but that, even if it did, AMEC have complied with it in substance. A stay of these proceedings would be an unjustified waste of time and money. Accordingly, the first ground relied on by the defendants to justify their refusal to provide these documents must fail.[5]AGENCY[26]On behalf of AMEC, Mr Hickey’s principal submission was that, pursuant to the first and second BSAs, the defendants were appointed to act as agents on behalf of AMEC, and that the documents relating to these arbitrations came into their possession in consequence of that agency. AMEC say that they are therefore entitled to have their own copies of these documents pursuant to the ordinary rules of agency.[27]On behalf of the defendants, it is said that they were not appointed as agents, or if they were, their agency did not extend to providing the documents in these arbitrations. As part of that second submission, Mr Choat said that there would have been no point in the SA and the NBA if these documents were to be provided anyway because of the pre-existing relationship of agent and principal.[28]There can be no doubt that the 1st, 2nd and 3rd defendants were appointed to act as AMEC’s agents. That is what clause 8.9 of the first BSA said, and what clause 8.10 of the amended document also said. The terms could not have been clearer. The agency was also recorded in the 1st defendants’ declaration (paragraph 7 above).[29]In relation to the 4th defendant, I consider that that is what clause 9.9 of the second BSA said, again in express terms. Mr Choat’s only argument was that the 4th defendant was there described as “agent or subcontractor”, and he baldly asserted that the 4th defendant was a subcontractor, not an agent. However, nothing was said to support this suggestion, and no subcontract was produced. In my judgment, on its true construction, the second BSA appoints the 4th defendant to act as agent, not as a subcontractor.[30]“It is a legal incident of that relationship [between principal and agent] that a principal is entitled to require production by the agent of documents relating to the affairs of the principal”: see paragraph 53 of the judgment of Mummery LJ in Fairstar Heavy Transport v Adkins and Another [2013] 2 CLC 272; [2013] EWCA Civ 886. A wider exposition of this principle can be found in the judgment of Colman J in Yasuda Firing Machine Insurance of Europe Ltd v Orien Machine Marine Insurance Underwriting Ltd & Another [1995] QB 174 at page 195:
“That obligation to provide an accurate account in the fullest sense arises by reason of the fact that the agent has been entrusted with the authority to bind the principal to transactions with third parties and the principal is entitled to know what his personal contractual rights and duties are in relation to those third parties as well as what he is entitled to receive by way of payment form the agent. He is entitled to be provided with those records because they have been created for preserving information as to the very transactions which the agent was authorised by him to enter into. Being the participant in the transactions, the principal is entitled to the records of them.”
[31]Accordingly, as agents of AMEC, the defendants were obliged to provide the documents sought to AMEC on demand.[32]I consider Mr Choat’s submission, to the effect that the documents sought came into existence after the first and second BSAs were signed, and were therefore not caught by any principle of agency, to be hopeless. The agent’s duty to keep and produce records on demand is ongoing. It plainly covers all documents which arise during the course of the agency, whenever they come into existence. I consider that Mr Choat’s related argument, that the defendants were agents for the purposes of the relevant sub-contract, but that this did not mean that they were agents for the purposes of the sub-contract arbitration, is misconceived, and for the same reasons.[33]As already noted, Mr Choat’s final submission on this aspect of the case was the suggestion that, because of the later SA, and its detailed provisions about conduct and documentation (paragraphs 11-14 above), the court should not look anywhere other than the SA for the parties’ relevant rights and liabilities. To put the point another way, he maintained that there would have been no point in the later SA if there was already an obligation on the part of the defendants to provide the documents.[34]It was not clear to me how, as a matter of analysis, it was possible to arrive at that conclusion. If the defendants, as agents of AMEC, had an obligation to provide these documents (which I have found they did), then that obligation would be sufficient to found AMEC’s claim now, unless it was expressly excluded by any provisions of the SA. Mr Choat did not put his case in that way and there is nothing in the SA which could possibly have that effect. Accordingly, I can see no reason why the defendants’ obligations as agents are not, on their own, sufficient to found AMEC’s claim in these Part 8 proceedings.[35]Three further points arise from the general arguments about the SA. First, the SA was primarily concerned with the detail of the name-borrowing arrangements, rather than simply the provision of documents. Secondly, although it dealt in passing with the mechanics of the provision of documents in clause 1.2, that clause was not inconsistent with the existence of the over-arching duty to which I have already referred (a point to which I revert in Section 6 below). And thirdly, dealing specifically with the suggestion that at least parts of the SA may have been otiose if there was a relationship of agency, it is sadly all too common for parties to commercial contracts to over-provide express terms regulating their relationship. Having waded through the Main Contract concerned with Project Neptune, I can say of my own knowledge that the various parties involved in this project were not immune to that weakness.[36]Accordingly, the documents sought by AMEC last October were documents which the defendants were obliged to provide to AMEC pursuant to the relationship of principal and agent. That is so, regardless of the subsequent SA. However I now turn to the detail of that document, in case I am wrong as to the existence of the defendants’ over-arching duty to AMEC as their agents.[6]THE ALLEGED RESTRICTIONS IN THE SUPPLEMENTAL AGREEMENT[37]Clause 1.2 of the SA (paragraph 12 above) set out clear obligations on the part of the defendants to provide information and documents. How do the defendants seek to escape the effect of those obligations?[38]The defendants argued that there was nothing in the SA to suggest that they were acting as agents. They submitted that the obligations at clause 1.2.2 were limited to the provision of documents “in respect of the proceedings brought against DE in the name of TES”, and that there were no arbitration proceedings brought by TES against SSD/DE in existence at the time of the SA. They argued that the second arbitration proceedings, which were brought by TES (and therefore caught by the words of the clause), cannot be the subject of this Part 8 claim, because AMEC did not know about them until after the proceedings were started. By contrast, the defendants accepted that the documents in the first arbitration (commenced by SSD in 2009) were within this Part 8 claim, but they submitted that they were not caught by the express words of clause 1.2.2, because the clause only referred to proceedings started by TES, not by SSD. They therefore maintained that the SA was of no help to AMEC[39]For the reasons set out below, I reject each of the points relied on by the defendants in respect of the SA.[40]First, the SA plainly says that the defendants were acting as agents. The Recitals could not be clearer. I reject Mr Choat’s submission that, as a matter of construction, I should ignore the Recitals. That is quite contrary to the modern approach of construing a document against its factual background, particularly where the parties themselves have highlighted important elements of that background by putting them in the Recitals. Thus all that I have said in Section 5 above applies again, even if I confine myself to the words of the SA.[41]Secondly, I have to construe the provisions of the Supplemental Agreement in accordance with common sense: see Rainy Sky SA v Cookmin Bank [2011] UKSC 50. The starting point must be that there can be no rational basis for distinguishing between the documents in an arbitration commenced by SSD against TES arising out of Project Neptune, and the documents in an arbitration commenced by TES against SSD, also arising out of Project Neptune. No such rational basis was identified. Indeed, on one view, it is the documents relating to a claim brought by SSD in which AMEC are going to be more interested, because they may have much less knowledge of (or answer to) the points that SSD might be making in their claim, when compared to the points being made by their agents, the defendants, in any arbitration proceedings which they might bring. Drawing a distinction between the two sets of arbitration proceedings, which may turn simply on who gets the arbitration notice in first, is wholly contrary to common sense.[42]Thirdly, I do not believe that the literal meaning of the SA offers any assistance to Mr Choat, who argued, by reference to Fujitsu Services Ltd v IBM United Kingdom Ltd [2014] EWHC 752 (TCC), that the court should always give effect to the literal meaning of the words used. The difficulty for the defendants is that the words “the proceedings brought against DE in the name of TES” are plainly intended to refer to proceedings which existed at the time of the SA in December 2009. At that time, the only arbitration proceedings that existed were the first arbitration, commenced by SSD against TES. Either the literal meaning of the words is that they were a reference to that first arbitration (because it existed at the time), or the words make no sense, because they refer to proceedings which did not then exist. If the latter, then it is appropriate for the court to find a different meaning, and to conclude that the words were intended to refer to those proceedings which did exist, namely the first arbitration.[43]Fourthly, there is nothing in the point that, even though there are now proceedings brought in the name of TES against SSD (the second arbitration), this Part 8 claim does not apply to those proceedings. I have already noted that, at the commencement of the claim, AMEC did not know about the second arbitration, due to the default of the defendants. But I do not consider that AMEC were obliged to amend the pleaded claim when they belatedly learned of the second arbitration, because the declaration sought at paragraph 1 of the prayer in the Particulars of Claim was for the information and documents “in respect of the arbitral or other dispute resolution proceedings between the Secretary of State for Defence and Turner Estate Solutions Ltd”. Those words are wide enough to cover both sets of arbitration proceedings.[44]Before leaving this topic, I note that, at one point in his oral submissions, Mr Choat stated, for the first time, that there was a separate name-borrowing agreement in respect of the second arbitration, and that therefore the court could not make an order without considering that document. This document was not exhibited and it was not shown to me. Moreover, as Mr Hickey observed in reply, this was the first that AMEC had heard of it, and it was a little difficult to see how there could be an effective name-borrowing agreement in circumstances where AMEC were not even a party to it. I do not, therefore, consider that the possible existence of some other agreement that did not involve AMEC can affect their right to the documents.[45]For these reasons, I consider that, not only are the defendants obliged to provide the documents sought as a result of their wider duties of agency, but they are also obliged to provide them in accordance with clause 1.2.2 of the SA.[7]THE DIFFERENT DEFENDANTS[46]Mr Choat spent some time distinguishing between the three Morgan Sindall defendants. He contended that there could be no claim against the 1st and 3rd defendants because they were not involved in the arbitrations and did not have any relevant documents. He then said that there could be no claim against the 2nd defendant because they were not a party to the first or amended BSA. In this way, on his analysis, notwithstanding the duties of agency and those set out in the SA, the Morgan Sindall defendants would again avoid providing any documentation pursuant to their obligations.[47]In my view, these submissions not only ignore common sense, but they also ignore the words of the first BSA, as amended, and the words of the declaration (paragraph 7 above). Those all made plain that the parties acting as AMEC’s agents were the “Buyer” (the 1st defendant) “or any other members of the Buyer’s group” (the 2nd and 3rd defendants). Mr Choat was driven to argue that the words “any other members of the Buyer’s group” were somehow meaningless, but it seems to me that they were clear, and designed to cover precisely the situation here, where the various rights and liabilities of the Morgan Sindall companies have been hidden in a fog of assignments and name-swapping.[48]Furthermore, I well understand why, out of an abundance of caution, this claim is made against all three defendants. The 1st defendant was ‘the Buyer’. The 2nd defendant apparently took an assignment from the 1st defendant in connection with the Project Neptune work and is closely involved in the arbitrations. And the 3rd defendant was the party who responded to the letters seeking the documents prior to the commencement of proceedings, and who expressly declined, on behalf of all of the Morgan Sindall defendants, to provide those documents.[49]Accordingly, I consider that the obligation to provide the relevant documents extends to all three defendants in the Morgan Sindall group. No similar point arose in relation to the 4th defendant.[8]CONFIDENTIALITY[50]The defendant’s final point was that these documents were confidential to SSD and that, since SSD had previously asserted the confidentiality of the documents in correspondence, it was not for the defendants to breach that confidentiality by providing the documents to AMEC. Again, it seems to me that this argument fails at every level.[51]First, I note that SSD originally made an application to intervene in these Part 8 proceedings, so that I could be addressed on any issues of confidentiality. However he made plain that he could not do this to any meaningful extent if he could not see the underlying documents as between AMEC and the defendants (ie the Business Sale Agreements and the like). The defendants refused to allow SSD to see those documents. SSD therefore withdrew his application to intervene. Accordingly, I very much regret that it is as a result of the defendants’ deliberate non-cooperation that SSD is not here to address any questions of confidentiality. The defendants cannot therefore credibly make submissions on confidentiality as if they were trying to protect SSD’s interests, because they have demonstrated that they are not.[52]Secondly, I consider that the defendants’ submissions on this point start from the wrong place. For the reasons already given, they have clear legal obligations to provide these documents to AMEC. Those obligations are neither expressly or impliedly qualified by reference to any concept of third party confidentiality. There is no authority to the effect that an agent need not provide documents to his principal if they are confidential to a third party. Accordingly, I am bound to conclude that, as a matter of law, the defendants are liable to provide these documents, regardless of any questions of confidentiality.[53]In other words, contrary to Mr Choat’s submissions, it is not for AMEC to demonstrate that their entitlement to the documents somehow ‘trumps’ the confidentiality of these documents to SSD. Instead, it is for the defendants to show that their unequivocal obligation to provide all these documents to AMEC should in some way be tempered by questions of third party confidentiality. They have wholly failed to do that.[54]Thirdly, although I was referred to the judgment of HHJ Humphrey Lloyd QC in Belgravia Property Co Ltd v S&R (London) Ltd and another [2001] 93 ConLR 59, the passage in question (at the end of paragraph [27]) contains only a fleeting reference to confidentiality. Significantly, that case was not concerned with questions of agency. Moreover, the judge talks about a possible agreement between works contractor and employer to avoid any confidentiality issues, something which has not arisen here by reason of the defendants’ unco-operative stance. The decision in Belgravia therefore makes no difference to my approach.[55]Finally, I should say that I regard the question of confidentiality as a smokescreen, the last in a line of obstacles put up by the defendants to try and avoid their obligations to AMEC to provide the arbitration documents. It is AMEC who are the relevant contracting party. It is AMEC who, on this scenario, are at risk for meeting any shortfall arising out of the defendants’ impecuniosity. The documents are as confidential to AMEC as they are to SSD. I can see no possible grounds on which SSD could assert confidentiality in a way or for a reason that would deprive AMEC of their right to see the documents relating to the disputes which have arisen under the relevant sub-contract which they signed. Again, no such grounds were identified at the hearing.[56]Accordingly, the alleged confidentiality of these documents to SSD is and can be no bar to their production to AMEC.[9]CONCLUSIONS[57]It will be seen that, taking the defendants’ arguments one by one, I conclude that there is no basis on which AMEC’s clear entitlement to see these documents can or should be obstructed. When taken together, I regret to say that the points raised, and the documents in which they were set out, created the impression that the defendants would prefer to take any point (good, bad or indifferent), rather than provide the documents to AMEC. That may serve only to confirm AMEC’s suspicion that all is not well with these arbitrations.[58]I therefore grant AMEC the relief that they seek. I make it clear that the orders concern both the first arbitration, started by SSD in November 2009, and the second arbitration, started by TES in June 2013. The relevant documents are those listed in paragraph 10 of Mr Hickey’s skeleton argument.[59]I will deal with all consequential matters, if they cannot be agreed, at a further short hearing. It will be important to deal with the mechanics of the court’s order, as well as all issues of costs, and the basis on which those costs should be assessed.

order

the alleged failure to comply with the TCC pre-action protocol (Section 4); AMEC’s over-arching claim to be entitled to these documents on the basis of principal and agent, and the defendants’ response to that claim (Section 5); the alleged restriction on what documents were to be provided, based on the terms of the Supplemental Agreement (Section 6); the arguments about the different positions of the various defendants (Section 7); and arguments about confidentiality and whether or not, in Mr Choat’s word, confidentiality “trumped” any residual entitlement that AMEC might otherwise have had to the documents (Section 8).

Cited in 1 later judgment